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New U.S. Home Construction Surges by Most in Three Decades in May

Last month, single-family homebuilding projects surged

Groundbreaking on U.S. single-family homebuilding projects surged in May by the most in more than three decades and permits for future construction also climbed, suggesting the housing market may be turning a corner after getting clobbered by Federal Reserve interest rate hikes.

Still, even with the Fed skipping a rate hike this month for the first time since early 2022, credit conditions remain in the process of tightening, and that could make it challenging for builders heavily reliant on construction and development loans to keep pace with May's rebound in the months ahead.

Indeed, economists noted that multifamily construction projects that had secured financing last year contributed to May's gains and may level off as the year progresses as new financing becomes harder to obtain.

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